Dollar/baht Don't Read Unless You Have A Interest

[Naam]

For the past several years the "trading desks" at these various banks have been contributing greater and greater sums to the company revenues. There are supposed to be "Chinese Walls" between the various departments but any thinking person knows that's all bullshit. If they have a pronouncement to make these days you can be sure one of their divisions has frontrun the announcement or is hoping the enhanced liquidity will allow them to extricate themselves from a position they hold.

according to (rather reliable) information from various multinationals that does not apply at all to mid/long term currency dealings but in many cases when it concerns the evaluation of corporate risk.

[lannarebirth]

For the past several years the "trading desks" at these various banks have been contributing greater and greater sums to the company revenues. There are supposed to be "Chinese Walls" between the various departments but any thinking person knows that's all bullshit. If they have a pronouncement to make these days you can be sure one of their divisions has frontrun the announcement or is hoping the enhanced liquidity will allow them to extricate themselves from a position they hold.

according to (rather reliable) information from various multinationals that does not apply at all to mid/long term currency dealings but in many cases when it concerns the evaluation of corporate risk.

I used the wrong terminology when I said trading desks. I should have said trading divisions. That section of the bank that trades financial and foreign exchange instruments for it's own account. If you look at turnover rates you can see no one is looking either mid or lomg term. This is just ramp it up to crash it down trading with an aim to make your quarterly numbers. Great volatility, which is what most traders love. They love it even more when they have the inside track as most of these firms do.

Edited August 10, 2008 by lannarebirth

[HYENA]

I was reviewing a chart because I just sent $500 and was shocked how much came out on the other end compared to the last time I did it. The chart predicts (and this is taking into account why the USD is strong momentarily and Euro is beginning a correction and the GBP has been there).

After reading multiple sources, the reason the USD is climbing is because of demand. The Euro gang is discovering the southern areas haven't enjoyed the growth as the north and are slowly hinting at corrections. Basically other markets are beginning to show wear so people are investing in USD's (trust me, our economy is in for a nasty run-- I have 4 friends that lsot their houses and it's not nearly over yet).

It will take a long time for us to recover here. Unless you live here, it's difficult to see in real life what's going on at the grocery store, and the inflation all about as a result of the crackhead behind the wheel. Unfortunately the advisors in the White house had much of what Bush planned before he stepped into office so likely the same types will be waiting for the next president to come in...and any policy will take 4-6 years to see real action in our economy.

OK, the predictions are that it is true the Baht is supposed to hit 45 December, then as the world sees better options than the USD, the USD will weaken (comparatively)... The USD will be weak for a long time; it's just the lack of options that's making it look strong. The good part is I'm going to Thailand to get married this winter so this year or the beginning of next year should see a better rate than I've seen my other 3 visits recently. They think Feb or March should be back where we were last month or so (baht to USD) so maybe if I get hitched in February, I'll see the tail end of the nice exchange...who really knows????

I'm no guru but so far, I've read different sites before my month long visits and the majority have been close enough for me.

Did anyone take into account how the non-guaranteed bank deposits will effect the Thai economy? They're predicting gold and property purchases for those with 1 million or more (since more than a million will no longer be guaranteed).

I'd imagine some huge change in the economy but I lack the depth in that area to know what the effect will be.

Edited August 23, 2008 by HYENA

[ray23]

Even the experts are guessing no real experiences to use as a guideline, so yuor's are as good as anyones

Edited August 23, 2008 by ray23

[BEENTHEREDONETHAT]

When you see the banks losing $ by the billions it makes it harder to take their predictions to seriously.

[Naam]

OK, the predictions are that it is true the Baht is supposed to hit 45 December,

what predictions are you referring to and "45 december" means WHICH year? assuming that december 2008 is meant that would imply a 33% weakening of THB respectively a USD strengthening vs. most major currencies of ~20-25% within four months.

that is not only highly unlikely but in my [not so] humble view a wet² dream

[lannarebirth]

Generally speaking, it is not beneficial to "look at a chart" and the continue on to discuss fundamentals and/or "what "they" say". If ever the three "methodologies" should be in agreement, it would be solely by accident .

Edited August 23, 2008 by lannarebirth

[britmaveric]

Certainly possible for 45, but I think 40 is more likely.

[ray23]

One thing for sure if either moves to fast it a can only end in Disaster. I'm very pleased with speed of growth at the moment. My guess we might see 40 again but not this year and probably not next either. But, boy can I be wrong

Edited August 23, 2008 by ray23

[Thai at Heart]

One thing for sure if either moves to fast it a can only end in Disaster. I'm very pleased with speed of growth at the moment. My guess we might see 40 again but not this year and probably not next either. But, boy can I be wrong

Did I miss something or is the total Thai economy going into freefall?

[lifeisrandom]

its not rocket science

lower interest rates = weak dollar

raise interest rates = strong dollar

[ray23]

One thing for sure if either moves to fast it a can only end in Disaster. I'm very pleased with speed of growth at the moment. My guess we might see 40 again but not this year and probably not next either. But, boy can I be wrong

Did I miss something or is the total Thai economy going into freefall?

No Doesn't look lile it

Nor as simple as simple a it seems

Posting another forum

"The easiest way to to portray this by showing the movement of other currencies against the USD - this is my chart showing how GBP, EUR, AUD & THB have moved as percentages against the USD from 15th July to 23rd August - click on chart to expand it to a readable size.

As you can see all of them, apart from the THB, experienced substantial falls of about 8% or more, these were as follows: "

THB - max fall of 1.9% - today 1.3%

GBP - max fall of 7.6% - today 7.3%

EUR - max fall of 8.4% - today 7.2%

AUD - max fall of 11.9% - today 10.8%

[Naam]

its not rocket science

lower interest rates = weak dollar

raise interest rates = strong dollar

it's by far not that simple. here's the proof. from 2004 till 2007 USD interest rates up, Dollar falling [graph1]. 2001 till 2005 EUR rates falling, EUR strengthening [graph2]. graph3 shows the two currencies from 2001 till 2007

[Naam]

Generally speaking, it is not beneficial to "look at a chart" and the continue on to discuss fundamentals and/or "what "they" say". If ever the three "methodologies" should be in agreement, it would be solely by accident .

but you have to admit that graphs can proof that certain generalising claims such as "no rocket science" do not apply.

[ray23]

I agree but that particular thread was only about a limited time frame. Fot that time frame I think it fairly accurate, what do you think?

For that time frame it would appear that other currencies fell further then the baht.

The original question was based on a comparison to other countries. The thought being that the BOT is maniputlating the baht, would seem to prove that out, in this time frame.

This came from a poster being up in arms and not being able to see that the dollar as the problem. Up until this point, the facts showed it being the dollar falling against all currencies. However, this one does not.

For the life of me I can not see the advantage in that the country has a surplus of dollars. Seems to me one hedge against inflation would be simply use those dollars to buy oil. Dollar down oil up.

The original article also talks about a 20% rise in exports, That number seems extremely high to me considering the world circumstances. Maybe it's the truth I really don't know, just have doubts

Your right not simple at all.

[Naam]

I agree but that particular thread was only about a limited time frame. Fot that time frame I think it fairly accurate, what do you think?

For that time frame it would appear that other currencies fell further then the baht.

there's no doubt about that.

[Pib]

My dart throw indicates the dollar will gain strength for the following reasons: Euro/UK interest rates heading down, US interest rates heading up in late 08/early 09, US getting a new President, Iraq conflict to wine down, oil prices heading down, and US stock market seems to be ahead of rest of the world in shaking off this subprime mess. And in terms of the Baht/Dollar exchange rate, the ongoing Thai government turmoil will continue to strengthen the desire for dollars.

[ray23]

Looking at the baht rate on Bloomberg this morning dollar prety much went up everywhere but here, where it lost a very small amount. The article does support the export growth I tend to believe Bloomberg more then the local news. Gee wonder why

But on the other hand dometic consumption has went down and doesn't appear to will do much better for the year. Bringing the true GDP down.

Interest rates BOT got some very strong direction both ways. I think they will raise them. If so they can quit manipulating the dollar for a bit, But eventually that will be the avenue of approach if they continue on the current course.

Thailand Economic Growth Probably Slowed, Easing Rate Pressure

By Suttinee Yuvejwattana and Michael Munoz

Aug. 25 (Bloomberg) -- Thailand's economic growth probably slowed for the first time in more than a year as increased exports of rice and rubber failed to offset weak local demand.

Southeast Asia's second-biggest economy expanded 5.8 percent in the second quarter from a year earlier after gaining 6 percent in the previous three months, according to the median forecast of 10 economists surveyed by Bloomberg News. The report is due today at 9:30 a.m. in Bangkok.

Slowing growth means the Bank of Thailand may be on the verge of its last interest-rate increase this year, according to a Bloomberg survey. Governor Tarisa Watanagase is coming under pressure from the government to keep borrowing costs on hold and spur the economy amid signs inflation may be easing.

``Putting politics aside, I see a lot of room for the central bank to increase its key rate by 25 basis points this time,'' said Vishnu Varathan, an economist at Forecast Singapore Ltd., who expects the Bank of Thailand to keep its benchmark unchanged at its meeting on Aug. 27. ``But things are quite messy. The government has tried to politicize interest rates.''

The Bank of Thailand will raise its one-day repurchase rate by a quarter of a percentage point to 3.75 percent, the second increase in two months, according to eight of 13 economists surveyed by Bloomberg. The rest expect borrowing costs to be left unchanged. Of the eight predicting an increase this week, four say it will be the last for this year and the others forecast at least a further quarter-point rise.

Inflation to Peak

``The central bank needs to raise rates another time to anchor inflation expectations and it should be the last time,'' said Usara Wilaipich, a Bangkok-based economist at Standard Chartered Plc., who predicts borrowing costs will start to fall next year. ``Inflation will peak in a couple of months before easing off as growth eases in the second half. The central bank needs to take care of growth.''

Lower fuel costs will start to slow inflation from October onwards, Finance Minister Surapong Suebwonglee said Aug. 15.

The central bank last month raised its key rate by a quarter point to 3.5 percent, the first increase in two years, after inflation hit a decade-high 9.2 percent in July. The move has been criticized by members of the government.

Thailand shouldn't raise interest rates because it will lower economic growth, newly-appointed Deputy Finance Minister Suchart Thadathamrongvej said on Aug. 7. Governor Tarisa should resign if the central bank's policy differs from the government's position, he added.

`Stand Straight'

Governor Tarisa on Aug. 21 vowed to ``stand straight'' and continue to act in ``the best interest of the country'' after King Bhumibol Adulyadej praised the Bank of Thailand for its handling of monetary policy and its concern with inflation.

The central bank and the finance ministry agree that Thailand's economic growth may ease in the second half as a global slowdown reduces demand for the nation's exports, even as their views on interest rates differ.

Thailand is ``relying a lot on exports,'' said Sebastien Barbe, a Hong Kong-based strategist for the investment banking unit of France's Credit Agricole SA. ``With the U.S., Europe and Japan decelerating, the rest of Asia will weaken in the next few months. It is a very challenging backdrop for Thailand.''

Exports from Thailand, which account for about 70 percent of gross domestic product, rose 26.3 percent in the second quarter from a year earlier. That was faster than the 22.9 percent pace recorded in the previous three-month period.

Consumer Confidence

Spending by local consumers and companies hasn't been that strong. An index of consumer confidence fell from April through June in line with surging oil costs, and protests and court cases against Prime Minister Samak Sundaravej's government.

Prime Minister Samak reshuffled his cabinet on Aug. 2, removing five ministers, after court rulings forced out key members of his administration. Allegations that Samak is a proxy for former premier Thaksin Shinawatra have led to protests since May urging the prime minister and his team to resign.

Thailand's Supreme Court on Aug. 11 issued an arrest warrant for Thaksin after he skipped bail and fled to the U.K. instead of attending a court hearing on corruption charges. The election commission will also decide next month whether to seek a court order to disband the ruling People Power Party because of alleged vote-buying.

The following tables show economists' estimates for economic growth and interest rates:

Thailand GDP Estimates

----------------------------------------------------------------

2Q 2Q 3Q 4Q GDP GDP

Firm YoY QoQ SA YoY YoY 2008 2009

----------------------------------------------------------------

Median 5.8% 1.0% 4.6% 4.1% 5.0% 5.3%

Average 5.8% 0.9% 4.6% 4.1% 5.1% 5.1%

High 6.2% 1.0% 5.0% 4.8% 5.4% 5.8%

Low 5.5% 0.8% 4.3% 2.9% 4.6% 4.5%

Number of Estimates 10 3 8 8 10 9

----------------------------------------------------------------

Action Economics 5.8% 1.0% 4.8% 3.6% 5.0% 4.5%

Capital Nomura 5.8% 0.8% -- -- 4.6% 4.8%

CIMB Securities 5.9% -- 5.0% 4.4% 5.3% 5.5%

HSBC 5.6% -- 4.3% 4.2% 5.0% 5.0%

Kasikorn Research 5.8% 1.0% 5.0% 4.6% 5.3% 5.8%

KTB Securities 5.5% -- 4.5% 4.0% 5.0% 5.3%

Moody's Economy.com 6.2% -- -- -- 5.4% --

SCB Securities 5.7% -- 4.7% 4.0% 5.0% 5.5%

Standard Chartered 5.8% -- 4.3% 2.9% 4.7% 4.5%

Tisco Securities 5.6% -- 4.5% 4.8% 5.2% 5.4%

----------------------------------------------------------------

Thailand Benchmark Interest Rate Estimates

-------------------------------------------------

Aug. Oct. Dec.

Firm 27 8 3

-------------------------------------------------

Median 3.75% 3.75% 3.75%

% Estimates at Median 62% 50% 50%

High 3.75% 4.00% 4.00%

Low 3.50% 3.50% 3.50%

Number of Estimates 13 10 10

-------------------------------------------------

Action Economics 3.50% 3.75% 3.75%

Capital Nomura Securities 3.75% 3.75% 3.75%

CIMB Securities 3.75% 3.75% 3.75%

Credit Suisse 3.75% -- --

HSBC 3.75% 4.00% 4.00%

Kasikorn Research 3.50% -- --

KTB Securities 3.50% -- --

Moody's Economy.com 3.50% 3.50% 3.50%

SCB Securities 3.75% 4.00% 4.00%

Standard Chartered Bank 3.75% 3.75% 3.75%

Reuters IFR 3.75% 4.00% 4.00%

Tisco Securities 3.75% 3.75% 3.75%

Westpac Banking Corp 3.50% 3.50% 3.50%

-------------------------------------------------

To contact the reporters on this story: Suttinee Yuvejwattana in Bangkok at [email protected]; Michael Munoz in Hong Kong at [email protected]

[Naam]

Hyena: OK, the predictions are that it is true the Baht is supposed to hit 45 December

Britmaverick: Certainly possible for 45, but I think 40 is more likely

*****

goooooood morning Gentlemen. this is your wake up call. rise and shine!

transfer 33.95 / cash 33.74

[bendix]

britmaverick has been predicting a resurgent dollar soaring to new heights for years now. I like his style. He's not one to let evidence get in the way of a dearly held belief.

[britmaveric]

Hyena: OK, the predictions are that it is true the Baht is supposed to hit 45 December

Britmaverick: Certainly possible for 45, but I think 40 is more likely

*****

goooooood morning Gentlemen. this is your wake up call. rise and shine!

transfer 33.95 / cash 33.74

34.1726 34.2682 34.4920

[ray23]

Well one thing for sure gentlemen this is a crazy week.

Baht was the biggest gainer in the region yesterday, better the the euro or the Pound. Must be because of all the stablity in the Country

[Naam]

SBC sep18 - 08.18 / transfer 34.08 cash 33.80

[ray23]

Terresa was on Bloomberg this morning. They showed Thailand dollar assets at 285 Billion dollars. So it's to me like they could they play sell the dollars for a long time

Of course she also said that with the new PM, things were going to be just peachy, funny no what I see at all.

[VegasVic]

Terresa was on Bloomberg this morning. They showed Thailand dollar assets at 285 Billion dollars. So it's to me like they could they play sell the dollars for a long time

Of course she also said that with the new PM, things were going to be just peachy, funny no what I see at all.

Ray, I think that the 285 billion refered to was in baht.

[ray23]

Might have been who knows. Bloomberg being Bloomberg was very Gentle with Terresa, but followed up later in the day with their own correspondent and one other. They did not see things the same as the BOT. They felt the political aspect would be a long term thing and would harm investments in the country. That had little hope for the mega projects essentially left over from the Thaksin era.

No matter what they have for dollars it appears they are busy today selling them. A bit of overkill I think.

Hard to keep pushing water uphill.

[Naam]

the only correct source of Thailand's foreign currency reserves is the IMF. status og july 2008 shows a total value (various currencies) of 123 billion dollars CASH. other reserves such as securities and gold NOT counted.

[ray23]

Well I would certainly check to that simply seems more realistic.

But not chump change by any means.

Last month they showed an import export deficate. But with the cost of commodities last month that is hardly a surprise.

Is that why they have been so busy trying to prop up the baht?

I keep looking for that answer, simply because I don't understand it.

I'm not buying off on the basket of currencies any longer, it was out perfoming most in the middle of a huge mess. That simply does not seem like a logical outcome to me.

[Naam]

strong Dollar? Baht weakening? yeah right! transfer 33.84 / cash 33.56 / 33.12 / 32.76 SCB 08.11 hrs.

[ray23]

Well it was fun while it lasted. What a week it was last week. Dollar down oil and commidities up. So we are back to fighting inflation in a heart beat. Light must have went on somewhere, oh Ya if they are goign to bail out the financial section, why we need to print more dollars, thereby increasing even further a huge National Debt.

What happened to this international agreement bewteen Cenral Banks to follow suit? I see now the UK is not going to to pump money into the system.

You know there is little doubt in my mnd that the world economy that we have known for so many fruitful years, is not the same and will not be for many years to come. The only question left is how severe a blow it will be. What they are doing now will not slove and may infact in the end make things worse. But since this is uncharted territory, all anyone can do it take a guess, in their case hopefully an educated one.

The Golden parachutes are really being looked at these days, was it the intent to reward failure. What made these guys so valuable to give them employment contracts like they have. They may not have known how to care for company's in a normal manner. But, they sure knew how to take care of themsleves. In the end I think they had those contracts written so that they couldn't lose. Some board agreed to it why?

What a happened to simple logic in this decade?

What has really changed here, yes the Thai baht got stronger as many other currencies did. But, was the problem solved is there a clear direction, I think not.

This is far from over, and the world will share, not any one country.

By the way I'm not a doom and gloom person, but I don't beleive in fairy tales either.